SoftBank posts $2.2B profit in June quarter, beats estimates
What's the story
SoftBank has posted a net profit of ¥347.3 billion ($2.2 billion) for the June quarter, beating analysts' expectations of ¥120.23 billion, according to LSEG estimates. However, this is nearly an 18% decline compared to the same period last year. The company's fiscal first-quarter profit was boosted by a major gain on its stake in chipmaker Intel and an increase in ByteDance's value for its Vision Fund division.
Investment gains
Massive gain on stake in US chipmaker Intel
SoftBank's stake in US chipmaker Intel has seen a massive increase, with the value of its shares rising by ¥1.3 trillion ($8.2 billion).
This comes after SoftBank announced a nearly $2 billion investment in Intel last year.
The surge in Intel's share price, nearly 400% over the past year, has helped SoftBank's investment division, separate from its Vision Fund, report a segment profit of ¥1.05 trillion.
Fund performance
Vision Funds division reports increase in value
The Vision Funds division, which includes investments in companies like OpenAI and ByteDance, recorded a $1.7 billion increase in value during the first quarter.
This was mainly due to a $2.2 billion rise in the value of SoftBank's stake in Chinese firm ByteDance.
However, unlike the previous quarter, where nearly all gains were driven by OpenAI, SoftBank saw no gain or loss from its investment in the AI company this time around.
AI losses
AI computing segment posts wider loss
SoftBank's AI computing segment, which includes its own chip companies such as Arm, Graphcore, and Ampere, posted a loss of ¥200.8 billion.
This is wider than the ¥32.4 billion loss in the same quarter last year.
The company attributed the deterioration in profit to higher research and development costs at these companies.